Disruptive innovation
From Hill2dot0
In 1997, Clayton Christensen wrote a book entitled The Innovator’s Dilemma, in which he suggests that innovation comes in two basic varieties: sustaining and disruptive. Christensen initially used the term “disruptive technology,” but in his sequel (The Innovator’s Solution) he changed the term to “disruptive innovation” to emphasize that it is not the technology per se that is disruptive. Rather, it is the strategy of the innovator that leads to disruption.
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Two Types of Innovation
Sustaining Innovation
A sustaining innovation is an incremental increase in features or performance for an established product. It is sustaining in that the continued enhancement in features and performance sustains (or maintains) the product’s market position. A significant percentage of the innovations we experience are sustaining innovations. Consider the desktop computer. The essential nature of the desktop computer has not significantly altered since its introduction in the late 1970s and early 1980s. It has a microprocessor, memory, a variety of I/O devices (e.g., display unit, keyboard), and software. What has changed over the almost three decades since its introduction are the number and type of I/O devices, the amount and type of memory, the size and nature of the display unit, the size of the computer system, the types of software available for use, and the speed and capability of the processor. These are incremental improvements over the base design.
Disruptive Innovation
A disruptive innovation, on the other head, is a new technology or innovation that displaces a sustaining technology or innovation. Most of the time, it is radically different from the technology it displaces, and often is a poorer performer. Although the latter may be counterintuitive at first, the disruptive technology usually captures the imagination of the market because it brings with it a twist not provided by the sustaining technology. It meets an unserved need for some unserved segment of the market. Digital cameras, for example, were a disruptive technology. Although the initial products created pictures that were far lower in quality than a traditional film-based camera, and they were fairly expensive, they permitted users to take, examine, and delete unwanted pictures without the need to pay to have them developed. And the pictures could be stored and shared with friends via Email or websites.
Varieties Of Disruption
There are essentially two kinds of disruptive innovation: low end disruptive innovations and new market disruptive innovations.
Low End Disruptive Innovation
The low end disruptive innovation targets feature bloat. This seems to be a trend in technologies. The initial introduction of a new technology is feature poor. As the technology matures, two things are continually increased. First, the general system performance is enhanced. Computers get faster. Digital cameras gain better resolution and increased shutter speed. CDs gain storage density. Second, the number of features is expanded. Early video cassette recorders (VCR) had a very simple feature set. They could play, fast forward, rewind, record with the press of a button, and eject the tape. Over time, VCR manufacturers added new features and functions as a way of competing with one another for market share. VCRs gained a clock, and with it the ability to program record times. They could change the encoding of the recorded video to get more or less video on a given tape (the trade-off being image resolution). In time, the feature set grew so rich that the remote control began to challenge the control panel of a small plane for complexity. Yet it remains true that the vast majority of consumers use a very small subset of the features of any given device or application. This means that, for most of the market, the manufacturers are overshooting the needs of the target market. This opens a door for a disruptive innovator to introduce a new product with a stripped down feature set that will be quickly adopted if the price is right.
Then an interesting dynamic occurs. The disruptive innovator begins the cycle of adding features and functionality, and the original provider is forced further and further up-market until it is squeezed out of the market. By this point, the disruptive innovation has slipped into a sustaining innovation model, is very likely to be saturating the product with features and functionality, opening the door for a new cycle of disruption.
New Market Disruptive Innovation
The new market disruptive innovation targets markets or market segments that are not served at all by existing innovations, and typically (but not always) does so with an innovation that under-performs the parallel innovation in other markets. For example, in the history of disk drive technology, at one point a smaller form factor disk drive emerged on the market. These drives were physically smaller, but were slower and lower capacity than the full-size versions. They saw little penetration in the market until microcomputers (and later, laptops) hit the market. Suddenly, in these systems, size was a major consideration and the new line of drives quickly expanded to dominate the new market segment that could not be serviced by the dominant drive technology of the day.
There are many examples of disruptive technology in the history of humanity:
- The combustion engine was initially slow to gain ground, but eventually displaced horses, humans, and the existing steam-powered systems. It displaced the latter because they could be manufactured to smaller specifications making them suitable for more applications.
- The CD was a disruptive technology that displaced vinyl albums and (once recording was possible) cassette tapes. It did so because it provided higher fidelity, a smaller form factor, and a greater lifespan. It also crossed domains between audio and data.
- IP Telephony (IPT) is another disruptive technology. Across the Internet it is less reliable, and prone to being lower quality, than traditional Time Division Multiplexing (TDM) telephony. It is also not as ubiquitous and does not yet have the same richness of feature sets. But the price of an Internet-based IPT solution (e.g., Skype), is free or almost free, even for international calls.
See Also
External Links
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